Use the data in this caseand linked exhibits (you do not need to research other sources) to address the following items.

Revenue Recognition

1. True or False - net income is the same under the gross method and the net method. Further, which method, gross or net, do you believe is more informative to investors who want to understand Groupon's business model? Why?

Financial Performance Metrics

1. Exhibit 6 presents selected financial statement ratios using the financial data for 2010 in Exhibits 1-3 as filed in the preliminary Form S-1.
2. Comment on Groupon's short term liquidity at the end of 2010. Which ratios did you use to reach this conclusion?
3. On average how long does it take Groupon to pay merchants for coupons sold during 2010? (Hint: Turnover = Cost of Revenue/Avg accrued merchant payable)
4. Decompose ROA. What factors are driving it?
5. Which ratios are impacted by the revenue restatement?